Virginia franchisor bonds.
From $125.

When the State Corporation Commission wants a franchisor to protect prospective franchisees’ initial fees, the Retail Franchising Act lets the franchisor post a surety bond instead of escrowing those fees. The bond is the amount your registration requires, and premiums start from $125.

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Authorized under the Retail Franchising Act (§ 13.1-557 et seq., 21VAC5-110) as an alternative to fee escrow

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Filed with the SCC Division of Securities and Retail Franchising as part of franchise registration

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Premiums start from $125 — the application collects no credit information at the standard amount; enter your required bond amount and apply for your price

From $125starting premiumInstantapproval for mostNo SSNin the application

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How it works

Three steps. One sitting.

No underwriting queue for the standard franchisor bond — enter your amount, pay, and file with the SCC. Here is the whole thing:

TODAY · ONLINE

Apply online

Your company details, the bond amount your registration requires, and the effective date — that is the entire application. It collects no credit information at the standard amount.

INSTANTLY

Issued on the spot

Most applications approve instantly as soon as you pay. Larger amounts may get a quick review, and if a check runs, it is a soft pull that never affects your score.

SAME DAY

File with the SCC

Submit the executed bond to the Division of Securities and Retail Franchising with your registration, and disclose it in Item 5 of your FDD. Wet-ink originals mailed on request.

About this bond

What it is and who needs it.

What the franchisor bond actually covers

Virginia registers franchise offerings through the State Corporation Commission’s Division of Securities and Retail Franchising under the Retail Franchising Act (Code of Virginia § 13.1-557 et seq.). When the Commission is concerned about a franchisor’s ability to perform, it can require the franchisor to escrow initial franchise fees until obligations are met.

The rules at 21VAC5-110 let the franchisor post a surety bond in lieu of escrow. The bond amount is generally tied to the initial franchise fee times the number of franchises signed in Virginia but not yet opened — and the franchisor must disclose the bond in Item 5 of its Franchise Disclosure Document.

The bond protects prospective franchisees: if the franchisor takes fees and fails to deliver, the harmed franchisee can recover against it. If the surety pays, the franchisor repays the surety. We issue the amount your registration requires with premiums starting from $125; the application collects no credit information at the standard amount.

Retail Franchising Act — § 13.1-557 et seq. (21VAC5-110)The Virginia Retail Franchising Act (Code of Virginia § 13.1-557 et seq.), implemented by 21VAC5-110, lets a franchisor post a surety bond in lieu of escrowing initial franchise fees, with the amount generally based on the initial franchise fee multiplied by the number of franchises signed in Virginia but not yet opened. The bond is filed with the SCC Division of Securities and Retail Franchising and disclosed in Item 5 of the FDD. Confirm the required amount with the Division.

You need this bond if you are

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A franchisor registering in Virginia the SCC has asked to protect initial fees

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Preferring a bond to escrow so you are not tying up cash in a trust account

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Renewing a franchise registration that carried a bond or escrow condition

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A franchisor with marginal financials the Division wants security from

One application, issued on the spot.

Submit the application with the bond amount your registration requires — no credit fields to fill out, and the executed franchisor bond is typically generated instantly, ready to file with the SCC.

Start the application →

FAQ

Common questions.

How much is the Virginia franchisor bond?Premiums start from $125. The bond amount is generally the initial franchise fee times the number of Virginia franchises signed but not yet opened, and your exact price is set by that figure at the application.

When does the SCC require this?When the Division of Securities and Retail Franchising determines a franchisor should protect prospective franchisees’ initial fees — typically tied to the franchisor’s financial condition. The Retail Franchising Act lets you post this bond instead of escrowing the fees.

Do I have to escrow fees instead?Escrow is the default the Commission can require, but 21VAC5-110 lets you substitute a surety bond. A bond is usually cheaper — you pay a premium starting from $125 rather than locking up the full fee amount in a trust account.

Is there a credit check?The application collects no credit information at the standard amount, and most applications approve instantly. If a check does run on a larger bond amount, it is a soft pull that never affects your score.

Do I disclose the bond in my FDD?Yes. The franchisor’s surety bond and its conditions must be disclosed in Item 5 of the Franchise Disclosure Document (or a Virginia addendum), and a copy of the bond is submitted to the Commission.

Which A-rated carriers underwrite these bonds?Typically Arch Insurance Company (A.M. Best A+) or Nationwide Mutual Insurance Company (A.M. Best A). Which one writes your bond depends on the bond type and your state. The carrier's name and official signature are printed on the bond you receive.

How do I contact Light RFP about this bond?Email insurance@lightrfp.com. It reaches the bond team at Light RFP Risk Management Services LLC (NY DFS License # PC-1978982). Write to us about quotes, applications, bond forms or certificates. We will respond within 24 hours.

Related bonds

Other Virginia bonds.

Franchisor bond, issued today.

Premiums from $125. Enter the amount your registration requires and file with the SCC the same day.

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